Mexico's construction industry suffered a downturn in 2017, contracting by 2.4% in real terms that year, following an average annual growth of 1.7% during 2014-2016.

The industry is expected to expand over the forecast period (2018-2022), supported by government efforts to develop the country's transport infrastructure, as well as the energy and utilities sectors. Under the National Plan 2018-2024, the new government, led by Andres Manuel Lopez Obrador (AMLO), seeks to attract more private investment to finance construction projects. The government also plans to develop the tourism sector and reconstruct earthquake damages.

The industry's output value in real terms is expected to rise at a compound annual growth rate (CAGR) of 2.75% over the forecast period, compared to 0.61% during the review period (2013-2017).

- Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in the Mexican construction industry

- Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline.

Key Highlights

- GlobalData expects the infrastructure construction market to retain its leading position over the forecast period, and account for 28.2% of the industry's total value in 2022. Over the forecast period, the market's growth will be driven by the government's focus to develop the country's road infrastructure. Under the National Plan 2018-2024, the government aims to develop, modernize and maintain the country's road network by 2024. The government also plans to invest MXN132.6 billion (USD 7.0 billion) through public private partnership to develop and maintain toll free roads.

- Forecast-period growth in the energy and utilities construction market will be driven by the government's plan to increase the share of renewable energy in terms of total energy mix, and encourage investment in renewable energy infrastructure projects. The government aims to generate 35% of the electricity from clean energy sources by 2024. It plans to attract MXN45.4 billion (USD 2.4 billion) of investment in renewable energy projects by 2020-2021.

- GlobalData expects the residential construction market to register a forecast-period CAGR of 10.71% in nominal terms, driven by the government's focus to address the country's housing deficit and reconstruct damaged properties by the earthquakes. The country's growing population and urbanization is also expected to support the market's growth. In order to reduce the housing deficit and to promote the construction of new social housing in the country, the government passed the new housing law in December 2016. Moreover, in 2017, the government announced plans to build 20,000 low-cost housing units in the Mexico City with a total estimated investment of MXN26.0 billion (USD 1.2 billion).

- Forecast-period growth in the commercial construction market will be driven by public and private sector investments in the leisure and hospitality sector. In 2017, the Mexican tourism ministry announced plans to invest MXN15.4 billion (USD 816.0 million) to develop tourism-related infrastructure in the state of Quintana Roo. Moreover, in July 2018, Apple Leisure Group announced plans to invest an estimated MXN19.1 billion (USD 1.0 billion) in building six new hotels and resorts in Quintana Roo, which will add 2,000 rooms to the tourism sector by 2020-2021.

- The total construction project pipeline in Mexico-as tracked by GlobalData, and including all mega projects with a value above USD 25 million-stands at MXN3.3 trillion (USD 176.5 billion). The pipeline, which includes all projects from pre-planning to execution, is skewed towards late-stage projects, with 64.2% of the project pipeline by value being in the pre-execution and execution stages as of January 2019.

Scope

This report provides a comprehensive analysis of the construction industry in Mexico. It provides-

We would like to thank the entire team of Ken Research in showcasing professionalism in research and quick turnaround time. We have had multiple research reports from Ken Research. The deadline communicated for research was duly met. The research reports were covering many aspects in detail. This showcases their endeavor and care for client satisfaction and a strong understanding of the clients’ requirements. Thank you again for your help... "Group Vice President Strategy, Aliaxis"